Nnejad

3x book I think. 1 billion RMBS in capital / 6.83 conversion x .15% stake = 22 mil. Purchase price is 66 mil.

Something which struck me today. . . If and when Fairfax exercises their warrants, it will have to consolidate the Brick onto its financial statements. Nothing to sneeze at. . . an extra 1 billion++ a year in sales plus related working capital/assets. So perhaps 400 million Canadian is to be prepared with liquidity for the increasing Canadian nature of their business (Northbridge, Ridley's, Brick . . .)

I can't believe this is still up for discussion. The definitive source on this should be the second quarter '09 report, which shows no change in ORH shares. Def 13 filings are notoriously unreliable.

And people investing, risk-free rather than with risk. Money's got to go somewhere...

He definitely watches "The Wire". His stock just went up in value (in my book).

Haha. I don't know why I was so surprised by my disapproval of that one. Any argument that begins with "you guys are clearly too dumb to understand" usually ends like that...

If an amount of money was at period 1 was being spent and invested, but now in period 2 is being held in cash, then that's severely deflationary. You could borrow that money and distribute it, for free, and even finance it by printing currency, and it still wouldn't be very inflationary, as it is just taking domestic product to a level previously achieved.

Run through your hypothetical example. Let's say the US borrows 2 trillion, and decides to just give it to people (instead of the much better option of making them earn it). Well now 2 trillion is in the hands of people with demand. And they will either spend it (creating demand for work), or invest it. Worst case, they're so risk averse they use it to buy the treasuries back, and its a net zero in stimulus. But more likely; those people will create demand, and so work and investment. Normally, such a move by government would require a high interest rate to draw money away from higher-return market alternatives. But right now, no one wants money to spend or invest, and they're willing to give it to government for free just for the safety. The only one left to step up is government. The arguments for this are pretty well stated by Keynes.

Sprott's argument is too simplistic, see the following example: If US borrows 2 trillion, it is to spend two trillion, meaning two trillion dollars reaches the hands of other US persons or institutions. Monetary velocity hovers around 1.5. So that means of that two trillion, persons/instituions will spend .7 trillion, and save 1.3 trillion. Already, we have found a source for much of the net increase. Now of the .7 trillion spent, it is again distributed to other members of the economy. Monetary velocity is 1.5, so .2 trillion is spent, .5 trillion is saved. So net result, is the US government borrows two trillion, and 3 trillion ends up being spent, and two trillion remains to be saved or invested. Since people are risk-averse, much of that will end up in government debt. The Sprott's of the world are dangerous, although not for the reasons they think. It's not a panic that's worrisome; the government can print money to start the process going. But by causing fear, he is really risking: a)changing people's habits and thus reducing their spending and monetary velocity going forward; and b) inhibiting the will for private investment to return. Which lowers the long-run growth of a country. Nothing to fear but fear itself, they say. And in war, I've heard nothing defeats the country quite like demoralizing the will and spirit at home.

Haha, i guess I can go along with that. Hell, it's already inspired me to swift kick the man at first sight of him.

Sanjeev, by posting this you are sure to get it more clicks, and thus help support and propogate this nonsense. It's my opinion that we should stop posting articles like this (which compares traditional insurance to derivatives to call Buffett a hypocrite?!) ... nonsense.

The difference, I think, being that berkshire now trades at book value.

If you come up with a list of ways or things that could kill the company, and then while overlooking that list, you notice that some of them are not very improbable, then you have some cause for concern for investing in that security. It is a very viable question to ask. That being said, there is not many ways to kill BNI; in fact, investors have a lot of potential to look forward to, and a strong moat to protect their fair share. That is why I'm a holder.